Based on your response, then how does a country like Japan stop the runaway compounding train once it gets started? Initially Japan might like the weaker currency, but since they import so much oil for instance a dramatically weaker Yen will eventually be a problem.

Would be very interested in hearing your response to Kyle Bass’s position on Japan in this report, specifically pages 7-9. Much of the full report seems to miss the “sovereign currency” distinction conflating Greece and the U.S. for instance, but the Japan section (7-9) is a bit different. Your thoughts on his take would be very helpful (or of course anyone else)

I read the first ten pages. These guys haven’t got a clue about basic monetary operations. If you have any money invested with them, take it out now. For an explanation of their confusion go to Bill Mitchell’s blog and search for “japan”.

That’s why I isolated it to the few pages specifically on Japan. I guess my question involves his claim that the annual interest alone on Japan’s debt will exceed the annual receipts of the treasury. I fully understand that from an MMT perspective this won’t’t present a problem. My question is, isn’t it possible at some point this could become a psychological tipping point and lead to a big fall in the value of the Yen? If the Treasury is paying out annual interest equal to government receipts, doesn’t the huge compounding effect of the money supply eventually become an inflationary issue?

BTW, I don’t have any investments with Kyle Bass, but I suspect almost all hugely successful investors don’t understand MMT so in general it doesn’t seem to be an impediment to success as an investor. Strange but true. In fact, other than Warren I wonder how many hedge fund stars do understand MMT?

UMKC back with yet another anti-Israel screed. Bill defends it by stating its about corruption (I guess suicide bombing gets a pass). When he posts links to articles he wrote about the totally corrupt PLO, I’ll believe his defense. Until then, it’s simply Israel hating and a strange obsession but typical of the left.

I agree with Dr. Martenson that on the face of it this does not seem plausible.

If the tax revenues do not grow by as much as projected over the next 4 years, then the budget deficit will remain significantly higher than projected, and the interest payments on debt will grow faster than expected. As the economy continues to recover, shouldn’t this continued deficit spending lead to increased aggregate demand and preclude a Japan-type outcome?